Conn. seeks to blunt health plan premiums' costs

Published 6:46 pm, Saturday, April 27, 2013

HARTFORD -- As they consider ways to reduce prices for people buying health insurance on the state's new marketplace, Connecticut officials are learning their options are narrow and could affect the state's insurance industry, a major employer.

One idea would limit how much insurers would be able to spend on overhead and put toward profit in small group insurance plans. But a lobbyist for the Connecticut Association of Health Plans has warned that the proposal could bring about unintended consequences for the tens of thousands across the state directly and indirectly employed by the insurance industry.

"We're certainly going to give the carriers an opportunity to weigh in on why we shouldn't do this and what else we can do to keep rates down," said Barnes, who hopes to offer legislation for the General Assembly to consider this session.

As government officials and insurers work to create the marketplaces known as exchanges that are the hallmark of the federal health care overhaul, a major concern for both has been that cost of insurance will be higher than families, individuals and small businesses expect or want to pay.

"The administration's concerns mirror exactly the concerns of the payer community and keep everybody awake at night," said Keith Stover, the insurance industry's lobbyist. "Where Ben's coming from and where the plans are coming from is the same place, which is, we want to do everything we can to mitigate the rate shock."

But Stover said he doesn't think there is any bill state lawmakers can pass this session that would blunt the effects of those rates. Enrollment for Connecticut's exchange, Access Health CT, opens Oct. 1 and coverage will begin Jan. 1.

"The benefit package is the benefit package. The cost of delivering those benefits to population X is the cost of delivering those benefits to that population," said Stover, adding how there are still many unknown costs for insurers, who now have fewer age groups they can use to spread costs.

"Unfortunately, from the folks working in state policy and the folks working on the health plan side, there is still a lot of things that are unknown," Stover said.

"The fact that there's so much uncertainty is one of the things I think that can have an impact on price."

On Access Health CT's website, the exchange promises it will make "robust health insurance plans available at the lowest possible cost" and how "competition between insurance companies in this new marketplace will keep costs down."

Additionally, many people are expected to qualify for discounts on insurance premiums or qualify for the state's expanded Medicaid program.

But Barnes acknowledges that plans are going to be more expensive, though he says it's because they'll be more valuable.

"These are very good plans," he said. "They will be more expensive because they're worth more to people. They'll cover more of their medical expenses."

Some needy parents of children who rely on the state's HUSKY health insurance program have told state lawmakers they won't be able to afford the premiums if they're forced to buy insurance from the exchange. Gov. Dannel P. Malloy's budget had ended the HUSKY coverage for an estimated 37,500 parents, but the legislature's Democratic-controlled Appropriations Committee restored the funding in its budget.

A final budget deal still needs to be negotiated.

"There probably is going to be sticker shock come next year for some people," said Rep. Robert Megna, D-New Haven, co-chairman of the legislature's Insurance Committee.

Megna said he welcomes Barnes' idea to reduce how much small group plans to spend on overhead and profits.

"This would absolutely, unequivocally help reduce those premiums," he said. "Secretary Barnes, I think, has a good point."